THE RIGHT WAY TO ENTER RETIREMENT LANE By: Bryan Gretkowski

Beginning of your Career So its time to start your career and the big question is when do you start saving. When you save your money no matter when, you will in the end receive more then you put in and have that comfortable retirement that everyone dreams about. CareerBuilder.com

What do I need to take into consideration when saving money for retirement? How much do I need to save each year? When should I start to save, at the start or years later? Will the interest rate be better for my money when I finally retire? What kind of investment fund should I take? Will we have another recession in the future? How much will I really need to survive on when I’m done working? How long will I live after retirement? The price of the dollar, will it grow or lower? And what material and luxury goods will I want in the future. How much will I need to pay for them? eHow.com

My Beginning Job: Accountant The starting salary for an accountant after graduation is $58,156 dollars in the first year I will retire at the age of 67 after working since the age of 24 = 44 years Money will begin to be withdrawn from the retirement fund at age 68 I will use a Roth IRA with Fidelity The later I wait to retire, the more percentage of money I will receive in my social security as depicted on SSA.govSSA.gov Fidelity.com Find Out How Much Accounts Make

Here is a screen shot from a life expectancy calculator that depicts that I will live to the age of 83. How Long Will I Live?

What my money is worth when I retire? (If $58, was the starting salary) then the equation would be as followed: $58, * (1+.020)^44 = $138, (Starting salary for final year). To maintain the lifestyle that I have, I must get at least $138, every year for my retirement until my death. Key: $58, = starting salary for accountants ( )^44 = equation for inflation $138, = starting salary for final year of employment Find Out How Much Accounts Make

Roth IRA (in a nutshell) It is retirement savings account that gets bigger because it is tax free. You won't pay taxes as you let the money accumulate or when you cash it out at retirement. Perfect account for young workers starting out because if done right (at the beginning), really adds up in the long run. Extremely flexible. You can invest in mutual funds, bonds or real estate. The maximum for this year is $4,000 a year, but by 2014 the amount should grow. You can only put into a Roth IRA only if you have income coming to you or you are married to someone who has income coming to her/him. If you make less then $99,000 a year and single, you can invest the maximum: if married the magic number is $156,000. You can take money out of the IRA at any time but if you do it before the age of 60, you could get hit with fees for taking the money out early. Roth IRA

If I Start To Save At the Start of My Career (Age 24) Beginning salary is $58,156 I will live about 16 years after the age of 67 (retirement age) 2 million dollars is ideal for what I’ll need to survive for the remainder of my life Investment rate will vary but starts at an inflation rate of 2% in year 2014 (depends on when we get out of the recession or if it gets worse) Putting $4,500 a year away in the Roth IRA Interest rate will be 6.5% InflationData.com Saving Right Away Excel Worksheet Here is a small screenshot of the investment numbers I came up with when the 2% inflation rate and the 6.5% interest rate was added to the beginning salaries.

What If I Waited To Start To Save $? 10 years later Invest $4,500 in IRA Inflation 2% Interest 6.5% If I wait to start to save after 10 years and start on the 11 th year by the end I will have saved $522, with the starting salary of $58, by the time I retire. After 10 year wait 15 years later Invest $4,500 in IRA Inflation 2% Interest 6.5% If I wait to start to save after 15 years and start on the 16 th year by the end I will have saved $362, with the starting salary of $58, by the time I retire After 15 year wait 20 years later Invest $4,500 in IRA Inflation 2% Interest 6.5% If I wait to start to save after 20 years and start on the 21 st year by the end I will have $245, with the starting salary of $58, by the time I retire. After 20 year wait 25 years later Invest $4,500 in IRA Inflation 2% Interest 6.5% If I wait to start to save after 25 years and start on the 26 th year by the end I will have saved $160, with the starting salary of $58, by the time I retire. After 25 year wait

The Charts That Depict the Steady Rise Of Money Being Saved Here’s the money you will save when you start to make $58, at the beginning of your career and save from year 1. Value of your Roth IRA

Withdrawing from the Roth IRA When doing the Annuity, you must take the interest, which is 6.5% and divide it by 1- (1+.065)^-16  means the years that I will live after retirement and that will equal the percent total you will take out each year..065/1-(1+.065)^-16 * the final amount saved or take the final amount you saved and divide it by the 16 years you will live to get these answers. PMT of $58, = $65, Since we are using the “save right away method” here are the final numbers: When the salary is $58,156.00, you would take out $65, from the total amount of $1,040, each year for the final 16 years of my life to get the total of the IRA down to zero Distribution of the Roth IRA

The Breakdown Age Original Amount After year amount taken out 76$520,484.84$455, $455,424.23$390, $390,363.63$325, $325,303.02$260, $260,242.42$195, $195,181.81$130, $130,121.21$65, $65,060.60$0 Age Original Amount After year amount taken out 68$1,040,969.67$975, $975,909.07$910, $910,848.46$845, $845,787.86$780, $780,727.25$715, $715,666.65$650, $650,606.04$585, $585,545.44$520, The IRA down to Zero

Sources Career Builder How to Plan for Retirement Full Retirement Age How long will I live? m.html Fidelity: Roth IRA othIRA/init?rt=rothIRA Accountant Starting Salary Roth IRA Inflation Data Value of a Roth Distribution of Roth money